[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.33,0:00:01.07,Default,,0000,0000,0000,,Hey, everyone.
Dialogue: 0,0:00:01.07,0:00:03.40,Default,,0000,0000,0000,,Today's video topic is\Nabout consensus protocols.
Dialogue: 0,0:00:03.70,0:00:06.09,Default,,0000,0000,0000,,It doesn't sound very glamorous, \Nbut it is something that's
Dialogue: 0,0:00:06.12,0:00:09.11,Default,,0000,0000,0000,,very important to understand if you're \Ninterested in cryptocurrency
Dialogue: 0,0:00:09.14,0:00:10.79,Default,,0000,0000,0000,,or blockchain tech in general.
Dialogue: 0,0:00:11.23,0:00:14.58,Default,,0000,0000,0000,,It is the groundwork for all of\Nthese coins that are out there,
Dialogue: 0,0:00:14.86,0:00:17.97,Default,,0000,0000,0000,,so it's important to understand it so\Nyou can better understand the project.
Dialogue: 0,0:00:18.20,0:00:19.70,Default,,0000,0000,0000,,Let's start with Proof of Work (POW).
Dialogue: 0,0:00:19.83,0:00:23.52,Default,,0000,0000,0000,,This is one that you probably hear of\Nmost often, it is what Bitcoin uses.
Dialogue: 0,0:00:23.68,0:00:26.12,Default,,0000,0000,0000,,And it is basically exactly\Nwhat it sounds like.
Dialogue: 0,0:00:26.43,0:00:28.100,Default,,0000,0000,0000,,Proving that work was done and\Nproving that the work was correct.
Dialogue: 0,0:00:29.08,0:00:31.93,Default,,0000,0000,0000,,Bitcoin and many other altcoins\Nuse this consensus system.
Dialogue: 0,0:00:32.22,0:00:35.50,Default,,0000,0000,0000,,And they do that so the authenticity\Nof the chain can be validated,
Dialogue: 0,0:00:35.75,0:00:39.62,Default,,0000,0000,0000,,and that all parties agree that transactions\Nthat happen are correct and accurate.
Dialogue: 0,0:00:39.90,0:00:44.28,Default,,0000,0000,0000,,I found an analogy online like usual that might\Nbe more helpful in explaining Proof of Work.
Dialogue: 0,0:00:44.63,0:00:49.32,Default,,0000,0000,0000,,So imagine that you are a kid in a math\Nclass and you were taking an exam.
Dialogue: 0,0:00:49.56,0:00:53.32,Default,,0000,0000,0000,,And the first kid to get to the answer \Nand be able to prove and show their work
Dialogue: 0,0:00:53.32,0:00:54.96,Default,,0000,0000,0000,,that they're correct gets rewarded.
Dialogue: 0,0:00:55.13,0:00:58.09,Default,,0000,0000,0000,,Now applying that to the crypto world, \Nthe math exam is the transaction,
Dialogue: 0,0:00:58.12,0:00:59.60,Default,,0000,0000,0000,,and the classroom is the blockchain.
Dialogue: 0,0:00:59.73,0:01:01.26,Default,,0000,0000,0000,,The student is the computer or node.
Dialogue: 0,0:01:01.59,0:01:04.40,Default,,0000,0000,0000,,And the brainpower is referring\Nto the computing power.
Dialogue: 0,0:01:04.66,0:01:08.20,Default,,0000,0000,0000,,And then the reference to a lot of effort \Non the side of the student refers to the
Dialogue: 0,0:01:08.20,0:01:11.14,Default,,0000,0000,0000,,amount of electricity that's\Nneeded to prove in Proof of Work.
Dialogue: 0,0:01:11.31,0:01:12.80,Default,,0000,0000,0000,,Some downsides for Proof of Work.
Dialogue: 0,0:01:12.92,0:01:17.04,Default,,0000,0000,0000,,Most obviously, it requires work to be\Ndone and that requires electricity.
Dialogue: 0,0:01:17.04,0:01:20.45,Default,,0000,0000,0000,,So as far as financial goes, \Nit's definitely the most expensive
Dialogue: 0,0:01:20.45,0:01:21.69,Default,,0000,0000,0000,,of the consensus systems.
Dialogue: 0,0:01:21.78,0:01:23.98,Default,,0000,0000,0000,,Some of you may have figured\Nthis out on your own already,
Dialogue: 0,0:01:23.98,0:01:26.89,Default,,0000,0000,0000,,but the hardware to mine is\Nalso exceptionally expensive.
Dialogue: 0,0:01:27.30,0:01:31.66,Default,,0000,0000,0000,,To the point that unless you have a\Nwarehouse filled with mining equipment,
Dialogue: 0,0:01:31.66,0:01:35.33,Default,,0000,0000,0000,,top end mining equipment, \Nit's basically not even worth it anymore
Dialogue: 0,0:01:35.33,0:01:38.66,Default,,0000,0000,0000,,based on the price you have to pay for \Nthe mining equipment and the amount
Dialogue: 0,0:01:38.66,0:01:41.29,Default,,0000,0000,0000,,for electricity to run all of it, really.
Dialogue: 0,0:01:41.51,0:01:44.30,Default,,0000,0000,0000,,So your bill at the end of the month\Nends up being more expensive than
Dialogue: 0,0:01:44.30,0:01:46.52,Default,,0000,0000,0000,,the amount of Bitcoin that\Nyou're capable of mining.
Dialogue: 0,0:01:46.68,0:01:51.08,Default,,0000,0000,0000,,Another issue is miners moving from the \NBitcoin blockchain to another more profitable
Dialogue: 0,0:01:51.08,0:01:55.25,Default,,0000,0000,0000,,easier blockchain, which we've seen \Nhappen in the past with Bitcoin and all
Dialogue: 0,0:01:55.25,0:01:56.66,Default,,0000,0000,0000,,its little alternating forks.
Dialogue: 0,0:01:56.80,0:01:59.35,Default,,0000,0000,0000,,Another downside is the issue\Nwith circulating supply.
Dialogue: 0,0:01:59.67,0:02:03.89,Default,,0000,0000,0000,,As the circulating amount goes up, \Nthe incentive for miners to mine goes
Dialogue: 0,0:02:03.89,0:02:07.60,Default,,0000,0000,0000,,down because the availability\Nof coins to mine is decreasing.
Dialogue: 0,0:02:07.79,0:02:11.16,Default,,0000,0000,0000,,So eventually people are going\Nto switch to another blockchain.
Dialogue: 0,0:02:11.16,0:02:14.77,Default,,0000,0000,0000,,A final downside to the Proof of Work \Nconsensus systems is something
Dialogue: 0,0:02:14.77,0:02:18.55,Default,,0000,0000,0000,,I discussed in my Crypto 101 video\Nwhere I covered blockchain tech.
Dialogue: 0,0:02:18.99,0:02:21.20,Default,,0000,0000,0000,,The biggest issue is a 51% Attack.
Dialogue: 0,0:02:21.45,0:02:25.38,Default,,0000,0000,0000,,And basically that means if you have \Nenough computational power to maintain
Dialogue: 0,0:02:25.38,0:02:29.24,Default,,0000,0000,0000,,and run 51% of the network, \Nyou then can control everything.
Dialogue: 0,0:02:29.43,0:02:31.91,Default,,0000,0000,0000,,Proof of Stake (PoS) is the next\Nmost popular consensus system,
Dialogue: 0,0:02:32.08,0:02:34.52,Default,,0000,0000,0000,,and unlike Proof of Work, \Nit doesn't use computational
Dialogue: 0,0:02:34.52,0:02:38.22,Default,,0000,0000,0000,,power and electricity to solve mathematical\Nequations to come to a consensus.
Dialogue: 0,0:02:38.52,0:02:41.06,Default,,0000,0000,0000,,Instead, each node will bet on a block.
Dialogue: 0,0:02:41.17,0:02:45.70,Default,,0000,0000,0000,,When that block gets added to the blockchain,\Nwhatever node had bet on it will get rewarded.
Dialogue: 0,0:02:45.70,0:02:48.87,Default,,0000,0000,0000,,A Proof of Stake system requires the \Nprover to show a certain amount of
Dialogue: 0,0:02:48.87,0:02:52.98,Default,,0000,0000,0000,,staking weight and it's age to be able\Nto participate in the betting process.
Dialogue: 0,0:02:53.01,0:02:56.51,Default,,0000,0000,0000,,In the Proof of Stake system, blocks\Nare said to be minted and not mined.
Dialogue: 0,0:02:56.51,0:02:59.78,Default,,0000,0000,0000,,And those who validate the transactions\Nand help to maintain the network
Dialogue: 0,0:02:59.78,0:03:01.72,Default,,0000,0000,0000,,are also referred to as nodes.
Dialogue: 0,0:03:01.87,0:03:05.08,Default,,0000,0000,0000,,Those individuals receive the\Ncryptocurrency as a reward
Dialogue: 0,0:03:05.11,0:03:08.10,Default,,0000,0000,0000,,for holding X amount of crypto \Nin their wallet, which helps
Dialogue: 0,0:03:08.12,0:03:09.45,Default,,0000,0000,0000,,to again maintain the network.
Dialogue: 0,0:03:09.47,0:03:12.09,Default,,0000,0000,0000,,In order to validate\Ntransactions and create a block,
Dialogue: 0,0:03:12.38,0:03:16.30,Default,,0000,0000,0000,,users must first put their coins at stake, \Nwhich is obviously where the name comes from.
Dialogue: 0,0:03:16.61,0:03:19.80,Default,,0000,0000,0000,,In this system, if a node validates\Na fraudulent transaction,
Dialogue: 0,0:03:20.08,0:03:21.61,Default,,0000,0000,0000,,they're going to lose\Nall of their holdings.
Dialogue: 0,0:03:21.64,0:03:24.24,Default,,0000,0000,0000,,And on top of that, they're not \Ngoing to be allowed to participate
Dialogue: 0,0:03:24.24,0:03:25.85,Default,,0000,0000,0000,,in the minting process in the future.
Dialogue: 0,0:03:25.96,0:03:29.41,Default,,0000,0000,0000,,Meaning the nodes will be incentivized \Nto validate only the correct transactions
Dialogue: 0,0:03:29.64,0:03:31.90,Default,,0000,0000,0000,,and help maintain the health\Nand security of the network.
Dialogue: 0,0:03:32.13,0:03:36.52,Default,,0000,0000,0000,,In a very loose comparison, it's kind of\Nlike keeping money in a savings account.
Dialogue: 0,0:03:36.88,0:03:39.29,Default,,0000,0000,0000,,You leave it there, you're not really \Nsupposed to touch it and you will
Dialogue: 0,0:03:39.29,0:03:41.46,Default,,0000,0000,0000,,acrue interest over X amount of time.
Dialogue: 0,0:03:41.70,0:03:44.79,Default,,0000,0000,0000,,Unlike Bitcoin, where you would\Nneed 51% of the mining power
Dialogue: 0,0:03:45.02,0:03:47.69,Default,,0000,0000,0000,,in order to overtake the network, \Nwith the Proof of Stake system,
Dialogue: 0,0:03:47.69,0:03:50.64,Default,,0000,0000,0000,,you would need 51% of the\Ntotal circulating supply.
Dialogue: 0,0:03:51.03,0:03:53.77,Default,,0000,0000,0000,,Depending on the project, that\Ncould be a very pricey endeavour.
Dialogue: 0,0:03:53.90,0:03:58.00,Default,,0000,0000,0000,,So because of that this isn't something that\Nmost people are worried about happening.
Dialogue: 0,0:03:58.14,0:04:01.71,Default,,0000,0000,0000,,A plus side to Proof of Stake is that \Nyou don't need expensive mining [hardware]
Dialogue: 0,0:04:01.71,0:04:03.42,Default,,0000,0000,0000,,in order to participate in the network.
Dialogue: 0,0:04:03.64,0:04:06.91,Default,,0000,0000,0000,,You need to leave your computer on 24/7, \Nwhich is kind of a pain, and the wallet
Dialogue: 0,0:04:06.91,0:04:09.09,Default,,0000,0000,0000,,needs to be up and running\Nand on the latest version.
Dialogue: 0,0:04:09.12,0:04:12.59,Default,,0000,0000,0000,,And obviously a side effect of that \Nis that Proof of Stake is more efficient
Dialogue: 0,0:04:12.59,0:04:16.00,Default,,0000,0000,0000,,and uses less energy because\Nit's not actively doing work.
Dialogue: 0,0:04:16.32,0:04:18.02,Default,,0000,0000,0000,,It's kind of just sitting there passively.
Dialogue: 0,0:04:18.10,0:04:19.44,Default,,0000,0000,0000,,Some downsides to Proof of Stake.
Dialogue: 0,0:04:19.84,0:04:22.51,Default,,0000,0000,0000,,So the same reason that it's\Ngood is also a weakness.
Dialogue: 0,0:04:22.67,0:04:25.37,Default,,0000,0000,0000,,The more you hold in stake,\Nthe higher rewards you get.
Dialogue: 0,0:04:25.58,0:04:28.27,Default,,0000,0000,0000,,And that's kind of a rich\Ngetting richer situation.
Dialogue: 0,0:04:28.35,0:04:31.34,Default,,0000,0000,0000,,And for obvious reasons, \Nbecause staking gives your rewards,
Dialogue: 0,0:04:31.34,0:04:36.01,Default,,0000,0000,0000,,another weakness is usually this isn't \Na great currency for transactionary things,
Dialogue: 0,0:04:36.25,0:04:39.15,Default,,0000,0000,0000,,because people want to hold it \Nand maintain it in the wallet
Dialogue: 0,0:04:39.15,0:04:42.45,Default,,0000,0000,0000,,to get rewards and because of that \Npeople horde it and it's not going
Dialogue: 0,0:04:42.45,0:04:44.90,Default,,0000,0000,0000,,out and doing things and there's\Na lot less circulation.
Dialogue: 0,0:04:45.03,0:04:48.36,Default,,0000,0000,0000,,Although this helps stabilize the network, \Neventually some of these coins are going to
Dialogue: 0,0:04:48.36,0:04:51.96,Default,,0000,0000,0000,,reach their max circulating supply, \Nand at that point they may become
Dialogue: 0,0:04:51.96,0:04:55.23,Default,,0000,0000,0000,,scarce and difficult to get or\Nvery expensive to purchase.
Dialogue: 0,0:04:55.36,0:04:58.23,Default,,0000,0000,0000,,I want to touch on a little bit more\Ndetail of the Proof of Stake system.
Dialogue: 0,0:04:58.54,0:05:00.33,Default,,0000,0000,0000,,There's two kinds of rewards systems.
Dialogue: 0,0:05:00.47,0:05:04.84,Default,,0000,0000,0000,,One is randomized, and a coin that uses\Nthe randomized consensus system is PIVX.
Dialogue: 0,0:05:04.98,0:05:08.71,Default,,0000,0000,0000,,Basically, this means the nodes that\Nare receiving the rewards are randomized.
Dialogue: 0,0:05:08.99,0:05:12.14,Default,,0000,0000,0000,,This makes it more balanced and\Nmore fair for the community.
Dialogue: 0,0:05:12.23,0:05:14.51,Default,,0000,0000,0000,,Coin Aged Based Selection is the next one.
Dialogue: 0,0:05:14.51,0:05:16.68,Default,,0000,0000,0000,,And that is pretty self explainatory.
Dialogue: 0,0:05:16.94,0:05:21.19,Default,,0000,0000,0000,,Basically it means that the next node is picked\Nbased on the age of the coins in the wallet.
Dialogue: 0,0:05:21.28,0:05:26.06,Default,,0000,0000,0000,,This one is where it's a little bit more unfair, \Nbecause this is calculated by the number
Dialogue: 0,0:05:26.06,0:05:29.96,Default,,0000,0000,0000,,of days that the coins have been staking \Nin the wallet times the amount you have,
Dialogue: 0,0:05:30.18,0:05:31.50,Default,,0000,0000,0000,,which gives you a network weight.
Dialogue: 0,0:05:31.92,0:05:35.20,Default,,0000,0000,0000,,So you can see where there would be a problem\Nif you're not holding a lot of coins
Dialogue: 0,0:05:35.20,0:05:37.30,Default,,0000,0000,0000,,that your network weight\Nis going to be smaller,
Dialogue: 0,0:05:37.30,0:05:40.57,Default,,0000,0000,0000,,and there's going to be a less chance \Nof you getting the reward as frequently
Dialogue: 0,0:05:40.57,0:05:42.68,Default,,0000,0000,0000,,as somebody who has a lot\Nmore coins than you.
Dialogue: 0,0:05:42.81,0:05:45.41,Default,,0000,0000,0000,,Most projects have some kind\Nof staking requirement.
Dialogue: 0,0:05:45.50,0:05:49.62,Default,,0000,0000,0000,,Meaning, when you send the coins to the \Nwallet they have to be in the wallet X amount
Dialogue: 0,0:05:49.62,0:05:53.29,Default,,0000,0000,0000,,of days or they have to be confirmed \Nby X amount of confirmations
Dialogue: 0,0:05:53.57,0:05:55.46,Default,,0000,0000,0000,,before they will be eligible to be staked.
Dialogue: 0,0:05:55.49,0:05:57.86,Default,,0000,0000,0000,,Once a user has made a block\Nand received a reward,
Dialogue: 0,0:05:57.86,0:06:00.62,Default,,0000,0000,0000,,their coin age resets to zero, \Nand that means that they have
Dialogue: 0,0:06:00.65,0:06:03.97,Default,,0000,0000,0000,,to wait a certain amount of time again\Nto participate and get block rewards.
Dialogue: 0,0:06:04.10,0:06:08.04,Default,,0000,0000,0000,,On to the next consensus system, which\Nis Delegated Proof of Stake or DPoS.
Dialogue: 0,0:06:08.61,0:06:11.14,Default,,0000,0000,0000,,This consensus system was\Nfirst used with Bitshares,
Dialogue: 0,0:06:11.38,0:06:14.25,Default,,0000,0000,0000,,but now you can see it being used\Nwith projects like Lisk and Ark.
Dialogue: 0,0:06:14.33,0:06:17.48,Default,,0000,0000,0000,,The difference between Proof of Stake \Nand Delegated Proof of Stake
Dialogue: 0,0:06:17.88,0:06:22.06,Default,,0000,0000,0000,,is the difference between direct\Ndemocracy and representative democracy.
Dialogue: 0,0:06:22.26,0:06:24.22,Default,,0000,0000,0000,,In a regular Proof of Stake consensus system,
Dialogue: 0,0:06:24.54,0:06:27.40,Default,,0000,0000,0000,,every wallet that holds coins\Nhas the ability to stake.
Dialogue: 0,0:06:27.91,0:06:31.86,Default,,0000,0000,0000,,In a Delegated Proof of Stake system, \Nevery wallet that holds a certain amount
Dialogue: 0,0:06:31.86,0:06:33.98,Default,,0000,0000,0000,,of coins has the ability\Nto vote on a delegate.
Dialogue: 0,0:06:34.23,0:06:36.36,Default,,0000,0000,0000,,These delegates perform \Nthe functions of validating
Dialogue: 0,0:06:36.36,0:06:38.11,Default,,0000,0000,0000,,transactions and maintaining the network.
Dialogue: 0,0:06:38.70,0:06:42.07,Default,,0000,0000,0000,,They get to take the transaction \Nfees as profit and this process is
Dialogue: 0,0:06:42.07,0:06:43.45,Default,,0000,0000,0000,,called forging or minting.
Dialogue: 0,0:06:43.69,0:06:47.67,Default,,0000,0000,0000,,The idea is then that the delegates \Nwill share the profit that they receive
Dialogue: 0,0:06:47.99,0:06:50.62,Default,,0000,0000,0000,,as the transactions fees with\Nthe people who voted for them.
Dialogue: 0,0:06:50.86,0:06:53.05,Default,,0000,0000,0000,,For us in the United States, \Nthis is almost identical to
Dialogue: 0,0:06:53.05,0:06:55.31,Default,,0000,0000,0000,,how we receive representation in Congress.
Dialogue: 0,0:06:55.67,0:06:58.88,Default,,0000,0000,0000,,So a small amount of people \Nthat are elected from our States
Dialogue: 0,0:06:59.17,0:07:00.96,Default,,0000,0000,0000,,represent us in the different Houses.
Dialogue: 0,0:07:01.81,0:07:03.66,Default,,0000,0000,0000,,And we've seen how well that goes over.
Dialogue: 0,0:07:03.98,0:07:08.03,Default,,0000,0000,0000,,A cool upside to Delegated Proof of Stake, \Nis because you're voting on someone
Dialogue: 0,0:07:08.19,0:07:10.53,Default,,0000,0000,0000,,to do the transactions and\Nto maintain the network,
Dialogue: 0,0:07:10.84,0:07:14.18,Default,,0000,0000,0000,,you're wallet doesn't need to be on because\Nsomebody else is doing that work for you.
Dialogue: 0,0:07:14.37,0:07:16.34,Default,,0000,0000,0000,,So you can still participate in the network
Dialogue: 0,0:07:16.34,0:07:19.27,Default,,0000,0000,0000,,and you will still receive\Nsome sort of minting reward,
Dialogue: 0,0:07:19.51,0:07:22.52,Default,,0000,0000,0000,,but your wallet doesn't have to be on which\Nmeans your computer doesn't have to be on.
Dialogue: 0,0:07:22.67,0:07:26.08,Default,,0000,0000,0000,,For people just entering the cryptospace, \NDelegated Proof of Stake may seem
Dialogue: 0,0:07:26.08,0:07:29.72,Default,,0000,0000,0000,,like a better option because they can join \Nstaking pools meaning they don't have
Dialogue: 0,0:07:29.72,0:07:31.83,Default,,0000,0000,0000,,to hold a lot and they can\Npool with other people.
Dialogue: 0,0:07:32.24,0:07:34.62,Default,,0000,0000,0000,,Whereas with Proof of Stake, \Nwhich I brought up before,
Dialogue: 0,0:07:34.85,0:07:38.40,Default,,0000,0000,0000,,you have to hold a lot of the coin in\Norder for it to really be profitable.
Dialogue: 0,0:07:38.60,0:07:41.76,Default,,0000,0000,0000,,Depending on how much that project is,\Nthat could be a really hefty investment.
Dialogue: 0,0:07:41.88,0:07:45.93,Default,,0000,0000,0000,,Delegated Proof of Stake gives people\Nwith a small or medium bag of the coins
Dialogue: 0,0:07:45.93,0:07:49.90,Default,,0000,0000,0000,,an option to participate in the network, \Nreceive rewards, and incentivizes them
Dialogue: 0,0:07:49.90,0:07:51.38,Default,,0000,0000,0000,,into buying into the project.
Dialogue: 0,0:07:51.40,0:07:53.40,Default,,0000,0000,0000,,Some down sides to\NDelegated Proof of Stake.
Dialogue: 0,0:07:53.89,0:07:57.68,Default,,0000,0000,0000,,The argument is by voting for delegates \Nthat we're concentrating the power
Dialogue: 0,0:07:57.94,0:08:01.72,Default,,0000,0000,0000,,to a limited amount of people \Nand thus kind of recentralizing
Dialogue: 0,0:08:01.72,0:08:03.29,Default,,0000,0000,0000,,a decentralized cryptocurrency.
Dialogue: 0,0:08:03.44,0:08:06.71,Default,,0000,0000,0000,,It could also suffer from the same issues\Nthat we see in the democratic party,
Dialogue: 0,0:08:07.06,0:08:10.26,Default,,0000,0000,0000,,which is voters not being engaged\Nand the system not working properly
Dialogue: 0,0:08:10.26,0:08:11.98,Default,,0000,0000,0000,,because there's not enough\Ncommunity involvement.
Dialogue: 0,0:08:12.19,0:08:15.03,Default,,0000,0000,0000,,If regular users fail to vote, \Nthere will be a tendency
Dialogue: 0,0:08:15.03,0:08:18.23,Default,,0000,0000,0000,,for the network to fall into larger \Nstakeholders who at that point
Dialogue: 0,0:08:18.23,0:08:19.65,Default,,0000,0000,0000,,can just vote for themselves.
Dialogue: 0,0:08:19.83,0:08:21.57,Default,,0000,0000,0000,,And we've actually already\Nseen this happen.
Dialogue: 0,0:08:21.86,0:08:25.07,Default,,0000,0000,0000,,I touched on this in my Lisk video, \Nbut there's a delegate group called Elite
Dialogue: 0,0:08:25.07,0:08:28.78,Default,,0000,0000,0000,,and they stopped paying out people \Nwho vote for them unless they vote
Dialogue: 0,0:08:28.78,0:08:30.47,Default,,0000,0000,0000,,for the entire group of Elite.
Dialogue: 0,0:08:30.85,0:08:34.02,Default,,0000,0000,0000,,Meaning that gives them control and\Nthey're able to manipulate the network.
Dialogue: 0,0:08:34.32,0:08:37.12,Default,,0000,0000,0000,,And for the last consensus system, \Nwhich is a little bit lesser known,
Dialogue: 0,0:08:37.42,0:08:38.51,Default,,0000,0000,0000,,is Proof of Activity (PoA).
Dialogue: 0,0:08:39.02,0:08:40.99,Default,,0000,0000,0000,,And this is only found \Non the Decred network,
Dialogue: 0,0:08:40.99,0:08:43.12,Default,,0000,0000,0000,,and I covered that topic not too long ago.
Dialogue: 0,0:08:43.58,0:08:46.03,Default,,0000,0000,0000,,But basically what they do is \Nthey're trying to take the
Dialogue: 0,0:08:46.03,0:08:49.16,Default,,0000,0000,0000,,best parts of Proof of Stake \Nand the best parts of Proof of Work
Dialogue: 0,0:08:49.47,0:08:52.24,Default,,0000,0000,0000,,and combining them into one network\Nso that they work in harmony.
Dialogue: 0,0:08:52.26,0:08:55.77,Default,,0000,0000,0000,,Proof of Work miners are creating blocks, \Nand the job of the Proof of Stake miners
Dialogue: 0,0:08:55.77,0:09:00.04,Default,,0000,0000,0000,,is to make sure that the Proof of Work miners \Nare creating blocks that are consistent
Dialogue: 0,0:09:00.04,0:09:02.68,Default,,0000,0000,0000,,with the desires of the people\Nthat are holding the currency.
Dialogue: 0,0:09:02.84,0:09:05.51,Default,,0000,0000,0000,,Some downsides to Proof\Nof Activity would be that
Dialogue: 0,0:09:05.51,0:09:10.42,Default,,0000,0000,0000,,Decred's the only project running it right now, \Nand that basically means that we don't
Dialogue: 0,0:09:10.42,0:09:14.62,Default,,0000,0000,0000,,really know as far as Bitcoin level \Nof transactions if the Decred network
Dialogue: 0,0:09:14.62,0:09:15.66,Default,,0000,0000,0000,,would be able to handle that.
Dialogue: 0,0:09:15.69,0:09:18.76,Default,,0000,0000,0000,,A more major criticism that I've\Nread or seen online about
Dialogue: 0,0:09:18.76,0:09:20.50,Default,,0000,0000,0000,,the Proof of Activity consensus system,
Dialogue: 0,0:09:21.03,0:09:24.73,Default,,0000,0000,0000,,is that because it's using Proof of Work \Nand Proof of Stake that there is just
Dialogue: 0,0:09:24.73,0:09:29.40,Default,,0000,0000,0000,,kind ofa lot of moving parts going on \Nand it's not as easy to get involved with
Dialogue: 0,0:09:29.40,0:09:32.50,Default,,0000,0000,0000,,from the beginning, so it might be a \Ndeterent from new people from getting
Dialogue: 0,0:09:32.50,0:09:37.74,Default,,0000,0000,0000,,interested because these things by themselves \Nare difficult to understand so taking all
Dialogue: 0,0:09:37.74,0:09:40.43,Default,,0000,0000,0000,,of those parts and putting them\Ntogether makes it even worse.
Dialogue: 0,0:09:40.54,0:09:43.98,Default,,0000,0000,0000,,So to finalize my points, obviously\Nthere's pros and cons to everything.
Dialogue: 0,0:09:44.31,0:09:47.99,Default,,0000,0000,0000,,I think that Proof of Work \Ndefinitely laid the groundwork
Dialogue: 0,0:09:47.99,0:09:52.06,Default,,0000,0000,0000,,to come up with more interesting and\Nmore efficient consensus systems.
Dialogue: 0,0:09:52.52,0:09:55.36,Default,,0000,0000,0000,,I think that eventually Proof\Nof Work is going to be,
Dialogue: 0,0:09:55.36,0:09:59.36,Default,,0000,0000,0000,,I don't want to say obsolete, \Nbut definitely less desirable
Dialogue: 0,0:09:59.36,0:10:03.87,Default,,0000,0000,0000,,to use for the sole purpose of efficiency \Nand the fact that it's just going to be
Dialogue: 0,0:10:03.87,0:10:06.02,Default,,0000,0000,0000,,way too expensive to continue to do that.
Dialogue: 0,0:10:06.24,0:10:10.11,Default,,0000,0000,0000,,Overall I think that randomized selection \NProof of Stake consensus systems like
Dialogue: 0,0:10:10.11,0:10:12.60,Default,,0000,0000,0000,,PIVX uses is going to be\Nthe best for longevity.
Dialogue: 0,0:10:12.96,0:10:16.15,Default,,0000,0000,0000,,It incentivizes people to stay \Nand help stabilize the network,
Dialogue: 0,0:10:16.56,0:10:20.40,Default,,0000,0000,0000,,but it also gives everybody an honest shot\Nat actually earning some block rewards.
Dialogue: 0,0:10:20.67,0:10:22.96,Default,,0000,0000,0000,,I'm sure eventually there'll\Nbe more consensus systems,
Dialogue: 0,0:10:22.96,0:10:26.49,Default,,0000,0000,0000,,and I may even have to do this video again,\Nbut for the time being I think I covered
Dialogue: 0,0:10:26.49,0:10:29.56,Default,,0000,0000,0000,,the ones that are at least the most popular,\Nand the ones that you're going to read
Dialogue: 0,0:10:29.56,0:10:30.71,Default,,0000,0000,0000,,about the most online.
Dialogue: 0,0:10:30.95,0:10:32.46,Default,,0000,0000,0000,,If any of you guys have any more questions,
Dialogue: 0,0:10:32.69,0:10:34.88,Default,,0000,0000,0000,,please feel free to pop on\Nover to my Discord server.
Dialogue: 0,0:10:35.10,0:10:36.54,Default,,0000,0000,0000,,I'll leave the info in the description.
Dialogue: 0,0:10:36.75,0:10:39.71,Default,,0000,0000,0000,,I want to thank you guys again for\Nwatching, and I'll see you guys soon.